Relevant of differential cost analysis takes all variable and fixed costs into account to analyze decision alternatives considers only variable costs as they change with each decision alternative considers the change in reported net income for each alternative to arrive at the optimum decision for the company O considers all variable and fixed costs as they change with each decision alternatives The term that refers to costs incurred in the past that are not relevant to a future decision is full absorption cost sunk cost incurred marginal cost under allocated indirect cost

Relevant of differential cost analysis takes all variable and fixed costs into account to analyze decision alternatives considers only variable costs as they change with each decision alternative considers the change in reported net income for each alternative to arrive at the optimum decision for the company O considers all variable and fixed costs as they change with each decision alternatives The term that refers to costs incurred in the past that are not relevant to a future decision is full absorption cost sunk cost incurred marginal cost under allocated indirect cost

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Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 10MC: Which of the following is one of the two approaches used to analyze data in the decision to keep or...

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Relevant of differential cost analysis
takes all variable and fixed costs into account to analyze decision alternatives
considers only variable costs as they change with each decision alternative
considers the change in reported net income for each alternative to arrive at the
optimum decision for the company
considers all variable and fixed costs as they change with each decision alternatives
The term that refers to costs incurred in the past that are not relevant to
a future decision is
full absorption cost
sunk cost
incurred marginal cost
under allocated indirect cost

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